CAG ready to audit private power distribution companies

New Delhi: As Delhi government ordered an official audit of the private power companies, the Comptroller and Auditor General (CAG) has indicated it is ready to go into the finances of the three distribution firms.

Sources said the Comptroller and Auditor General's (Duties, Powers and Conditions of Service) Act, 1971 provided for audit of private companies on the request of the Lt Governor (in the case of Delhi) into any company in which substantial investment has been made by the government. The only rider is that such an audit can be ordered only after consultation with the CAG.

On Tuesday, Chief Minister Arvind Kejriwal had met CAG Shashi Kant Sharma and discussed with him the issue of audit of the private power distribution companies. Kejriwal’s Cabinet on Wednesday decided to go for the audit and the Lt Governor made a formal request to the CAG.

CAG sources said the official auditor has no hesitation in undertaking the job. However, the CAG office would not directly interact with the private companies but do the job through the Delhi government departments to go into the books of accounts of the private firms. Meanwhile, one of the private firms circulated a letter of the CAG in 2002 declining to appoint official auditors into the working of the private companies.

CAG sources said that in the 2002 case, there may not have been a formal request from the Lt Governor as required under law.